Luxury watch retailer Watches of Switzerland saw a significant surge in its shares, marking a notable 9.7% increase, following the company’s reaffirmation of its ambitious goal to more than double sales and profits by 2028.
The U.K.-based retailer, known for its exquisite collection of luxury timepieces, reported a promising uptick in revenue to £379 million ($467 million) for the most recent quarter, with a notable rise in watch sales, despite a slight decline in jewelry sales.
Notably, the company witnessed the most robust growth in the U.S., boasting an 11% increase in constant currency, while the U.K. and Europe experienced a slight decline of 4%. The positive performance in the American market has underscored the company’s commitment to further expand its presence and capitalize on the lucrative pre-owned market, particularly with a focus on certified pre-owned Rolex watches.
CEO Brian Duffy emphasized the company’s strategic initiatives, including plans to accelerate new showroom projects, engage in M&A activities, and enhance partnerships with prominent luxury jewelry brands in the U.S. market. The firm’s ambitious plans also include a vision to make pre-owned Rolex watches account for a significant portion of sales in both the U.S. and the U.K. by 2028.
The market’s positive response to Watches of Switzerland’s growth plans is seen as a testament to the company’s resilience, particularly in the face of recent challenges such as the August downturn caused by competitor Rolex’s acquisition of watch retailer Bucherer. However, with the recent reaffirmation of its five-year plan, the company has managed to instill confidence in investors and industry experts, indicating a positive trajectory for its future growth.
Equity retail analyst Kate Calvert from Investec noted that the market reaction was largely driven by the absence of any negative developments in the update, following previous uncertainties triggered by the Rolex acquisition news. Calvert also highlighted the company’s encouraging performance in the U.K. market and a slight acceleration in the U.S., affirming the positive outlook for Watches of Switzerland as it continues to forge ahead with its ambitious expansion and growth strategies.
